There are two major types of infectious vaccinia virus particles: mature virions (MVs) and enveloped virions (EVs). The MVs, which consist of a DNA-protein core surrounded by a lipoprotein membrane, are assembled in cytoplasmic viral factories and contain about 80 polypeptides. A subpopulation of MVs is wrapped by modified trans-Golgi or endosomal cisterna containing additional viral membrane proteins, transported along microtubules to the cell periphery, and exits the cell through the plasma membrane. The EVs are essentially MVs with an additional membrane that is disrupted prior to fusion of the MV with the cell during entry. One of the most challenging questions is how the initial viral membrane of the immature virion is formed. Using biochemical, genetic and microscopic approaches, we have obtained evidence that the endoplasmic reticulum is the source of the viral membrane and have identified several viral proteins involved in this process. In addition, we have shown that retrograde transfer is required for the formation of the wrapping membrane.